Iowa Senate Bill SF507

Iowa 2023-2024 Regular Session

• Introduced: 3/2/23
• Engrossed: 3/7/23

Caption

A bill for an act concerning public contracts with companies that boycott certain companies or that engage in nonpecuniary social investment policies.(Formerly SSB 1094.)

Impact

The provisions of SF507 will significantly alter the landscape of public investment in the state by instituting constraints on how and with whom public funds can engage. Public entities are required to terminate contracts with scrutinized companies within a specific timeline, which can introduce challenges to existing agreements and potentially limit investment opportunities. The bill argues that this is necessary to ensure investment decisions remain focused on fiscal outcomes rather than political considerations, thus aiming to protect taxpayer interests.

Summary

Senate File 507 establishes new regulations governing public contracts related to investment and management of public funds. Designed to limit contracts with companies that engage in nonpecuniary social investments or that boycott certain sectors, the bill mandates that public funds avoid doing business with companies identified on a scrutinized company list. This list is required to be developed by each public fund and updated annually, with the initial version due by March 1, 2024. The intent is to bolster financial prudence and mitigate perceived political influences on public investments.

Contention

Notable points of contention surrounding SF507 include the limitations it places on public funds and the definition of what constitutes nonpecuniary social investment. Critics could argue that the strictures may inadvertently harm entities involved in legitimate social initiatives or responsible investment practices. Furthermore, the alignment of such regulations with broader social issues—such as environmental activism or human rights—raises questions about the potential economic ramifications in critical sectors like fossil fuels and firearms, which the bill specifically addresses in its stipulations.